Exactly what are the specs. on the .WMV files and which MS CODEC's were used (both Audio & Video) are used?

Your computer is on the slow side in general terms and processing the MS CODEC's might be straining it. Tell us about your I/O sub-system, i.e. your HDD's, their size, speed, amount of defragmented free space and how they are allocated for your system plus how the Scratch Disks are allocated for this Project. The more detail, the better.